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Can California Model the Future of Work?

October 9, 2017

As the number of contingent and gig workers in the United States continues to rise, our labor laws and policies need to shift to fit our new reality. We’ve been here before—in 1950, the “Treaty of Detroit” cracked the model for how both workers and companies could thrive in the post-war 20th-century world. The leading technology companies of the mid-20th century, the auto industry, worked out a deal with workers through the leading union to get both sides what they wanted. Workers got good wages tied to the rise in the cost of living, health care, pensions, and input in decisions that affected their future. In return, the companies got a cooperative, stable workforce and avoided backlash from the public for being the bad guys.

This new model at the commanding heights of the postwar economy was quickly adopted by other industries and reinforced by government policies. It became one of the major drivers of the postwar economic boom and the rise of the American middle class, helping create the America that many people long to see again. Could today’s tech industry play the role that the auto industry did more than half a century ago, and help iron out a 21st century safety net? We’re going to explore this question during an afternoon event on October 17th, featuring California Lt. Governor Gavin Newsom and two-time Governor of Michigan Jennifer Granholm, among others.

Yet even if the tech industry does step up, government will need to pull its weight, too. “The worker/employer challenges are not going away,” Jim Daly wrote in Reinvent’s Medium publication, “and some legislators have taken the initiative to smooth the road. Both New York and Washington have proposed measures that would permit gig companies to pay into a benefit fund for workers allowing them freedom to develop portable benefits. In Washington state Rep. Jessyn Farrell (D) has proposed a bill that would require sharing economy companies to contribute money toward a benefits system for independent contractors who work on their platforms.

“On a national level, Senator Mark Warner (D-Va) proposed national legislation aimed at helping non-traditional workers. The bill asks the federal government to set aside $20 million in funding for organizations to look at the types of benefits programs individual workers could take with them from job to job, like paid sick days or a retirement plan, to provide them with some sort of safety net. That bill has drawn support from the Independent Drivers Guild, which represents about 50,000 ride-hailing drivers.”

Natalie Foster, the Co-Chair of the Economic Security Project, proposed a new “Treaty of San Francisco,” modeled on last century’s “Treaty of Detroit,” in an interview with Reinvent. “The future of worker voice is also the future of our democracy,” Foster said. “I fundamentally believe that history has proven that to be true, and it’s true in every other industrialized nation. If there is nothing to balance the power, then the power moves unchecked, and the future of work will be dystopian. We often talk in these conversations about those glorious days of where manufacturing jobs throughout Middle America built an American middle-class—mostly for white men. But those jobs were not inherently good jobs.”

A 21st-century “Treaty of San Francisco” would provide all workers with benefits that have fallen by the wayside for many, including an income that matches the rising cost of living, consistent work that provides income security even in economic downturns, good healthcare that can support a family, vacation time to recharge creativity and increase productivity, retirement funds set aside for old age, and a voice in decisions that affect their futures.

“If you remember the beginning of the manufacturing boom,” said Foster, “it was immigrants, newly arrived immigrants, it was children working in factories, the conditions were terrible, the pay was terrible. It was only because people organized for better workplaces that we ended up with the safety net that we are now trying to figure out what the 21st century version of looks like. We had 50 to 80 years of a workforce that had a pension, that had safety standards that were built into law, that people that had to adhere to it, that had benefits and protections and had wage guarantees. None of that was pre-ordained.”